Kentucky $12,500 Down Payment Assistance Program (2026 Guide)

Updated for 2026

Kentucky first-time and repeat homebuyers just got a major boost. The Kentucky Housing Corporation (KHC) has raised its Down Payment Assistance Program (DAP) from $10,000 to $12,500.

Whether you’re using an FHA loan, VA loan, USDA Rural Housing loan, or Conventional mortgage, this program can cover down payment and closing costs, helping you qualify with less cash upfront.

Enhanced Program Terms
Program Detail Maximum Assistance Amount $12,500 $10,000
Interest Rate 4.75% fixed 3.75% fixed
Loan Term 15 years 10 years
Estimated Monthly Payment ~$97/month ~$107/month
Buyer Advantage $2,500 more assistance Standard program

Note: Monthly payments are approximate and based on loan terms provided by KHC. Borrowers must meet program eligibility and underwriting guidelines.

Who Qualifies for the $12,500 KHC Assistance?

  • Credit Score: Minimum 620
  • Income Limits: Vary by county and household size (typically up to 80% of area median income)
  • Loan Types: FHA, VA, USDA, and Conventional loans eligible
  • Homebuyer Type: First-time and repeat buyers may qualify
  • Property: Must be in Kentucky and serve as primary residence (single-family, condo, townhome, or eligible manufactured home)
  • Purchase Price Limit: $544,232 (new or existing homes, 2026 cap)

How Much Can You Save?

Example:

  • Home Price: $200,000
  • Down Payment (FHA 3.5%): $7,000
  • Closing Costs: $5,500
  • Total Cash Needed: $12,500

With the KHC $12,500 program, a buyer could finance the entire amount—potentially buying with zero out-of-pocket down payment.

Application Process: How to Get Approved

  1. Check credit – Minimum 620 required.
  2. Verify income – Provide pay stubs, W-2s, and tax returns.
  3. Employment history – Typically a 2-year history is needed.
  4. Debt-to-income ratio – Monthly debts should usually be under 45–50% of income.
  5. Work with a KHC-approved lender – Your lender reserves the $12,500 DAP funds directly with KHC after approval.

Frequently Asked Questions

Q: Can I use this program with USDA loans?
Yes. Since USDA already requires no down payment, the $12,500 can cover closing costs, escrows, and prepaid expenses.

Q: Is this a grant or a loan?
It’s a loan, not a grant—repaid over 15 years at 4.75% interest. There is no prepayment penalty if you want to pay it off early.

Q: Do I have to be a first-time buyer?
Not always. Repeat buyers may qualify in certain areas if income and property guidelines are met.

Q: How long does it take to close?
Most KHC loans close in 30–45 days, depending on appraisal and underwriting timelines.

Next Steps for Kentucky Homebuyers

If you’re planning to buy a home in 2026, this limited-time program could save you thousands. With higher assistance amounts and affordable terms, it’s one of the most powerful tools for first-time and move-up buyers in Kentucky.

Contact Joel Lobb – EVO Mortgage
📧 Email: kentuckyloan@gmail.com
📞 Call/Text: 502-905-3708
🌐 www.mylouisvillekentuckymortgage.com
📍 911 Barret Ave., Louisville, KY 40204

Compliance Notice

EVO Mortgage Company
Company NMLS ID: 1738461
Joel Lobb, Senior Loan Officer – NMLS ID: 57916
Licensing: Kentucky Mortgage Loans Only
Consumer Access: www.nmlsconsumeraccess.org
Equal Housing Lender | Not endorsed or sponsored by any government agency

Disclaimers:
• All loans subject to credit approval and property eligibility
• Terms and conditions subject to change without notice
• APRs are estimates only and may vary based on creditworthiness, loan amount, and program guidelines
• This information is for educational purposes only and not a commitment to lend
• Please consult with qualified mortgage, tax, or legal professionals for specific advice